This Week in Startups IRL to shut down after faking 19M users, ZIRP fraud, Databricks acquires MosaicML for $1.3B | E1768
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Jun 27, 2023 
Vinny Lingham, an entrepreneur specializing in identity verification, joins the discussion to reveal the shocking truth behind IRL's fake user base. He delves into the manipulative tactics behind user metric inflation in tech and the dark side of social media growth fueled by misleading KPIs. The conversation highlights the importance of due diligence in startup investments amid rising fraud cases. Additionally, Lingham shares insights on AI's transformative role in customer support and the balance between innovation and responsible practices in a rapidly evolving landscape.
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Fake Users at IRL
- IRL, a social messaging app, shut down after faking 95% of its users.
- The company raised $170M at a $1.17B valuation from SoftBank before the fraud was revealed.
The Fake Account Problem
- Social media platforms lack identity verification, leading to fake accounts and inflated user numbers.
- This issue stems from KPIs focused on user growth rather than genuine engagement.
Diligence Experiences
- Vinny Lingham shares his experience with due diligence, noting its absence in early-stage funding rounds.
- Later-stage rounds involved more rigorous diligence, especially during acquisitions.